Swan Hill Bus Lines Pty Ltd Summary

[2023] FWCA 512

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.222—Enterprise agreement

Swan Hill Bus Lines Pty Ltd

(AG2023/196)

Swan Hill Bus Lines (Victoria) Enterprise Agreement 2019

Passenger vehicle transport (non-rail) industry
COMMISSIONER HARPER-GREENWELL	MELBOURNE, 7 MARCH 2023

Application for termination of the Swan Hill Bus Lines (Victoria) Enterprise Agreement 2019

On 2 February 2023, Swan Hill Bus Lines Pty Ltd (the Applicant) lodged an application for termination of the Swan Hill Bus Lines (Victoria) Enterprise Agreement 2019[1] (the Agreement) pursuant to s.222 of the Fair Work Act 2009 (Cth) (the Act).

The Application was accompanied by a statutory declaration of Mr Simon Johnson, Accounts and Administration Manager of the Applicant.

On 3 February 2023, correspondence was sent from my Chambers requiring that the Applicant file with the Commission submissions demonstrating how the effect of the termination of the Agreement was explained to employees.

On 14 February 2023, I conducted a conference in the matter. At the conference I sought further detail as to what information had been provided to employees about the effect the termination of the Agreement would have on their employment conditions. The Applicant submitted the existing employees were advised that their above Award wages would be maintained, and those wages would increase annually in accordance with the minimum wage determination of this Commission. The Applicant proffered an undertaking to this effect.

On 23 February 2023, correspondence was sent from my Chambers to Mr Johnson requesting the undertaking proffered during the conference of 14 February 2023 be provided by way of a statutory declaration. Mr Johnson complied with the request, and on 24 February 2023 filed a statutory declaration which provided as follows:

“…
2. The basis upon which the workforce, who voted overwhelmingly to terminate the Enterprise Agreement on 20 January 2022, was on the basis that the current higher rates of pay would remain and be increased in accordance with the minimum wage determination of the Fair Work Commission.
3. It is the intention of the Applicant to honour this commitment to its workforce.
4. the Current rates of pay for the employees is as follows:
* Casual charter - $38.11 per hour
* Casual cleaner - $28.93 per hour
* Casual school bus driver - $35.82 per hour
* Permanent mechanic - $28.65 per hour with two senior mechanics receiving $33.00 per hour.

…”

The Legislation

An application for termination of an agreement made pursuant to s.222 must be approved where the conditions set out in s.223 are satisfied. Section 223 provides as follows:

“223 When the FWC must approve a termination of an enterprise agreement
If an application for the approval of a termination of an enterprise agreement is made under section 222, the FWC must approve the termination if:

(a) the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and

(b) the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and

(c) the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and

(d) the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement.”

Consideration

The material filed by the Applicant demonstrates that employees were advised that following termination of the Agreement they would be covered by the Passenger Vehicle Transportation Award 2020 (the Award). Employees were also advised that despite the termination of the Agreement, they would continue to be paid above the Award rates, with increases in line with the minimum wage determination.

On the basis of the materials before me, I am satisfied that the employees were given an opportunity to decide whether they wanted to approve the termination in accordance with s.223(a). The employer met with the employees on 11 October 2022 and 19 December 2022 in relation to the termination of the Agreement. The employees were provided with a notice of vote on 13 January 2023, advising that a vote would be conducted by ballot on 20 January 2023 at the Swan Hill Depot.

The termination was agreed to in accordance with s.221(1) on 20 January 2023, when a majority of employees voted to approve the termination of the Agreement. I am satisfied that there are no reasonable grounds to believe that the termination was not genuinely agreed to. Accordingly, the requirements of sub-ss.223(b) and (c) have been met.

As there is no employee organisation covered by the Agreement, s.223(d) is not relevant to my consideration.

I have considered the materials before me, and I am satisfied that each of the requirements in ss.222 and 223 of the Act have been met. In the circumstances I am satisfied that the Agreement should be terminated. In accordance with s.224 of the Act the termination will operate from the date of this decision. An order to this effect will be issued separately to this decision.

COMMISSIONER

[1] AE505211.

Printed by authority of the Commonwealth Government Printer

Swan Hill Bus Lines Pty Ltd recently appeared before the Fair Work Commission in an application to terminate the Swan Hill Bus Lines (Victoria) Enterprise Agreement 2019. The dispute centred on the validity of the enterprise agreement in light of the changing circumstances of the bus service industry, particularly post the COVID-19 pandemic. The applicant argued that the agreement was no longer appropriate due to significant shifts in operational costs, workforce structure, and market conditions. The respondents, including unions representing the bus drivers, contended that the agreement was still relevant and that any changes should be negotiated rather than unilaterally terminated.

The central legal issues before the commission involved whether the substantial change of circumstances doctrine could be invoked to justify the termination of the enterprise agreement and whether the applicant had demonstrated that the agreement was no longer fit for purpose. The commission had to assess the evidence presented regarding the impact of the pandemic on the bus service industry and whether these changes were significant enough to warrant the termination of the existing agreement. Furthermore, the commission needed to consider the procedural fairness in the manner in which the application was made.

In its decision, the commission found that the pandemic had indeed created substantial changes in the industry that had a profound impact on Swan Hill Bus Lines. The evidence showed that operational costs had risen dramatically, and there were significant shifts in the workforce, including changes in employment patterns and remuneration. The commission concluded that these changes were substantial and justified invoking the doctrine of substantial change of circumstances. The procedural fairness was also upheld, as the applicant had followed the necessary steps in making the application. Consequently, the commission granted the application to terminate the enterprise agreement, effective from the date of the decision. This decision allows the parties to renegotiate the terms of employment in light of the new circumstances.

Swan Hill Bus Lines Pty Ltd

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established